Myth #1 “I would file bankruptcy, but you cannot get out of paying credit cards anymore.”
This is something the credit card companies would like you to believe, and something debt collectors may tell you, so you think you have no option but to make a deal with them.
Major revisions were made to bankruptcy law in 2005.
The goal of the credit card companies and other lenders with that law was to make it more difficult to file bankruptcy.
And they did.
But, credit card debt is still just as dischargeable as it was before the law changed.
Myth # 2 “You can only keep one car if you file bankruptcy.”
Heard this one today.
Not sure where it came from.
There is an enormous amount of mis-information circulating about the bankruptcy laws.
Some of it comes from the creditors and debt collectors, but some is just erroneous word of mouth from people who “know somebody who knows somebody” who lost their second car because they filed bankruptcy.
Well, when one of these is offered up to me as a source, I usually ask: How long did that person go to law school?”
The unvarying response: oh, they did not go to law school.
To which I say: Then why get legal advice from them.
Could be someone misinterpreted something somewhere along the line.
Could be the person who filed bankruptcy, blamed the bankruptcy process, or the lawyer.
People lose cars because they cannot pay for them.
Bankruptcy does not allow you to keep a car that you owe money on, without continuing to pay for it.
It is possible to lose a car to the bankruptcy trustee, if you do not have enough exemption to keep it.
This depends on the state you file in, as exemption law is state law, even though bankruptcy law is federal and in a federal court.
As I always say, consult competent counsel, talk to an expert, not your neighbor.
Common Bankruptcy Myths